ICYMI: Failure Of Indonesia-Norway REDD A Major Lesson For Brussels, Wealthy Nations

Belgian agronomist and co-author of the Palm Oil Monitor, Pierre Bois d’Enghien, wrote in the Jakarta Post, Indonesia’s leading daily newspaper, and Mace Magazine, UK media focused on politics, about the recent decision by the Indonesian Government to cancel its agreement with Norway, known as REDD, because of Norway backtracking on its climate commitments.

Pierre Bois d’Enghien looks at how the climate finance promised by wealthy countries over the past decade has fallen short of the promises, and the relations between the West and the developing world on this issue, must be improved.

Key excerpts –

According to Jakarta, Norway was delaying payments that were agreed by both parties after Indonesia posted its lowest deforestation rates on record. Norway’s obstinance – and Indonesia’s response – have profound implications for the EU’s bold Green ambitions, in particular the efforts to build on the global Paris climate accords. The chances of a deal at the forthcoming COP26 in the U.K. are now receding at pace.”

The decision to walk away from the REDD deal with Norway shows that Indonesia will no longer go along with climate policies that it feels are imbalanced. Many other middle-income and developing nations will follow this approach. The question is whether the West, and especially Brussels and London, will learn the lesson and re-commit to supporting the Global South. If not, a new global climate deal looks further away than ever.”

Norway’s move – and Indonesia’s response – will have significant implications for the COP26 meeting in Glasgow and for the future of climate diplomacy between rich and poor nations.

This is leading to disillusionment and an understandable scepticism: why would Indonesia and others sign up to these agreements again?

You can read Mace Magazine here, and The Jakarta Post here (limited access) full text below:

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Failure Of Indonesia-Norway REDD A Major Lesson For Brussels, Wealthy Nations

Norway’s stonewalling on deforestation incentive payments to Indonesia undermines future rich-poor cooperation on climate change.

Last month, Indonesia’s Foreign Ministry announced that it was cancelling a decade-long agreement with Norway known as REDD, under which Indonesia would receive payments for reducing deforestation rates.

According to Jakarta, Norway was delaying payments that were agreed by both parties after Indonesia posted its lowest deforestation rates on record.

Norway’s obstinance – and Indonesia’s response – have profound implications for the EU’s bold Green ambitions, in particular the efforts to build on the global Paris climate accords. The chances of a deal at the forthcoming COP26 in the U.K. are now receding at pace.

If the Commission is to play its part – and given the EU’s climate leadership it has a central role to play – then learning the lessons of the REDD failure is essential.

When Indonesia and Norway signed their agreement in 2010, the forces shaping global climate policy were very different.

Although a global problem, reducing emissions was a higher priority for wealthy countries; poor countries were simply more concerned with alleviating poverty and raising living standards.

It was well understood that a ‘low carbon transition’ for poor and even middle income countries could not happen without the rich world effectively compensating poor countries. This included the idea of ‘technological transfer’, which is assisting poorer countries gain access to high cost, low emissions technologies.

For forested countries like Indonesia and Brazil with high deforestation rates, reducing emissions from deforestation and forest degradation (REDD) was a clear path.

But there was a significant opportunity cost. Locking up forests meant losing land for agriculture, both small and large scale. This was particularly acute for Indonesia and its palm oil sector. Analyses indicated that the financial returns for palm oil plantations were around ten times anything that could be offered by a carbon price.

Regardless, Norway promised cash payments to both Indonesia and Brazil for improving their performance on deforestation.

Indonesia –was prepared to take leadership on the issue. It signed the agreement with Norway to considerable fanfare in 2010.

A considerable – and technically formidable – team was assigned to prepare Indonesia for a REDD pathway.

The first and most critical step was the introduction of the forest moratorium in 2011, which ringfenced primary forests, peatlands and other areas from development. The moratorium has since been extended and made permanent.

This was the first major step taken by Indonesia in terms of attempting to reduce its forest-based emissions.

Following that moratorium came another, separate one, which put a halt to palm oil development. A national mandatory sustainability certification standard was developed for palm oil. Indonesia has also fundamentally reformed many parts of its bureaucracy, including jurisdictional relations, spatial planning, business licensing and other processes. The result is the lowest level of deforestation in the country since records began. In other words, REDD is working.

Except that Norway has refused to keep its side of the bargain. The tranche – a relatively small payment of USD56 million – has been held up with Norway now changing the goalposts and making fresh demands. One Indonesian minister summed up the frustration stating: “We were wasting our time.”

It has been apparent that the climate finance promised by wealthy countries over the past decade has fallen short of the promises.

This is all the more problematic because many in the developing world see policies, particularly those coming from Brussels, that seek to support environmental outcomes – but only when they support developed world interests (such as EU farmers looking to protect against foreign imports).

Take the EU’s Renewable Energy Directive, which sought to promote the production and use renewable fuels. When it became apparent that biofuels from Indonesia would eventually win the majority share of the EU’s renewable market, Brussels imposed both tariffs and bans on those markets.

Or similarly, the EU’s proposed Carbon Border Adjustment Mechanism (CBAM). CBAM will impose a tariff on imported steel and other products including from developing nations.

Indonesia – and other countries in the region – have expressed considerable alarm at these policies.

The decision to walk away from the REDD deal with Norway shows that Indonesia will no longer go along with climate policies that it feels are imbalanced. Many other middle-income and developing nations will follow this approach. The question is whether the West, and especially Brussels, will learn the lesson and re-commit to supporting the Global South. If not, a new global climate deal looks further away than ever.

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